College Trust Funds
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Diane Said:
How many trust fund college students are voting for Obama?We Answered:
It is truly amazing to me how having a college education or pursuing one has somehow become a NEGATIVE factor, a point of derision, among many blue-collar conservative Democrats. Apparently those of us who are college-educated are immune to any problems in life. Reality check: many college students - I would dare say, most college students - have little in common with the little hedonists that you see on MTV. To assert otherwise is to betray a clear, irrational bias against college students and America's youth.I, for one, have paid for my undergraduate education entirely through merit-based scholarships that I had to compete for, based on my record in high school. I will finance my graduate education through a mixture of scholarships and loans. I worked part-time to save money for 4 straight years while in high school, and I have had either a part-time job or a paid internship each summer while in college. My family background is strictly middle class, with total income in a typical year of at or around $50,000. And I have been supporting Obama since day one. Why? I am extremely liberal on social/cultural issues and a social democrat when it comes to the economy and fiscal/monetary policy; I support Obama because I know that he's part of a new paradigm, because he's going to fundamentally change Washington, because he has the best chance of beating the Republicans in November, and because his policy positions are closer to mine than Senator Clinton's on the issues that I most deeply care about.
So yes, I'm sure that many of the stereotypically rich, BMW-driving, hedonistic, sons and daughters of privilege are in support of Senator Obama. As are many of us middle-class college students who have not had life handed to us on a silver platter. Unfortunately, we're the ones who seem to be ignored and clumped in as part of this whole evil "liberal, wealthy, educated elite."
Natalie Said:
Do some college funds have to be used for education purposes only even when the child turns 18?We Answered:
Yes, there are. I know of several different types, each one with their own set of rules, investment limits, eligibility, advantages and disadvantages.There are two very well-known ones, though.
First is a 529 College America account. Second is a Coverdell ESA. Each one has its own special limitations and advantages.
Check out this website for more information, and then talk to an investment advisor.
Cathy Said:
How do trust funds work, trustee help, how can I get a hold of the money?We Answered:
The trustee is responsible for administering the trust under the terms of the trust documents. It has been set up that way precisely so that you can NOT get your hands on the money. If it is an education trust, the money can only be used for expenses of education, e.g. tuition, books, fees, room & board at the dorm, etc.Most education trusts are set up so if there is any money left over after you complete your college education and grad school (if you go on), that money will be turned over to you at a specific age. Typical ages can be 25, 30, 35, or 40. Education trusts are typically small, and might not even cover college costs these days. If the education trust specifies it can only be used for education and you do not go to college, or drop out, you might never see a penny of the residual money, depending on how it was set up.
Trusts in general can be larger sums, in which case you may be limited to receiving income from the trust (or a percentage of income from the trust!) for your lifetime with the residual going to grandchildren or whoever created the trust wanted to have the money.
Each trust is slightly different, so you would have to know exactly how your trust is set up and how much money you are talking about.
Bottom line is there is no way you can get that money or use any of it for anything other than the specific purpose of the trust.
Diane Said:
Legality of a trust fund requiring college graduation?We Answered:
A trust provision is legal if a court is willing to enforce it. A court is likely to enforce a requirement to graduate from college under most circumstances. If there was some sort of catastrophic brain injury to the beneficiary that made college impossible, then a court might be willing to modify it.Requiring a college education doesn't sound unreasonable.
Brandy Said:
If I put $ into a college (trust) fund for my kids, and wife and I divorce, can either of us touch the fund?We Answered:
It depends on who was put as the guardian of that money on the account.If you want it for your kids' education, put it in their name, you as the guardian, then have it stipulated that money cannot be taken out by them unless you sign for it first to ok the transaction.
Cathy Said:
Spendthrift Trust - as a college fund?We Answered:
It is not as simple as a spendthrift trust in establishing residency. My step sister went to vet school in another state. Her first year in vet school was an out of state resident. She had to move officially with all documents to be considered an instate resident with documents and bills. She gained it for her second year. Unfortunately, your parents' income and savings would still be considered into the financial aid formula until you are 24 years old.Julie Said:
i am 19 years old and my dad says i have a college/university trust fund?We Answered:
Your Dad set up the fund. Growing up is being able to approach the people you need to ask the questions, then listen.